Cal,
Thanks for the suggestion.

1: The ETF's in question are all Canadian Barclay ETFs. I looked at a few
Barclay US ETFs and they do not have the issue. I did not do an exhaustive
search of all US ETFs.

An example of the "reinvested distribution" without additional shares for
Canadian ETF issued by Barclay can be seen at:
http://www.ishares.ca/product_info/f...=XIC&year=2006.

2: In terms of how to handle the issue of adjusting cost basis as a result,
I decided to do the following (tested it and it seems to report correctly):

A: at the end of each year do a cost basis adjustment SELL and BUY
sell the shares at cost - Return of Capial (if any) thus the sell = no
cap gains
buy the same shares at the net sell receipt + the "reinvested
Distribution" = the new adjusted cost basis.

The above works for Canada as we do not have differentiation of long term
versus short term cap gains. But I understand in the U.S., the sell-buy will
trigger the problem of long versus short term cap gains.

I will also try your way of splits and reinvest. Your way seems to be less
cumbersome than mine and overcomes the issue of false sell-buy transactions
that triggers other problems.

thanks again








"Cal Learner-- MVP" wrote:

- quote -

In microsoft.public.money, Frustrated Money User wrote:

- quote -


If you are motivated enough, you could do a suitable split, and then
ReinvestDividend to get the additional shares. Plus there could be a
problem with rounding later... That could be dealt with.

Example:
Buy 100 [at] $10.

Then $1 div per share.

Do a 10 for 11 split.

Reinvest $100 dividend to buy 9.0909090909 (etc) shares to bring you
back to 100 shares.


Can you give an example of such an ETF?

I own some ETFs which from time to time reinvests its distributions.
However, the distribution reinvestment does NOT result in additioanl units
(shares) of the ETF. This essentially increases the adjusted cost basis.

Example:
Buys 100 share of XYZ [at] $10 cost basis = $1000
a distribution of $200 is declared and "reinvested" without changing share
numbers.
The result is holding 100 shares at a adjusted cost basis of $1200 or $12
per share.

Distribution reinvestment with additional units/shares is easy and MONEY has
specific investment "activities" to handle it.

But, the "reinvestment of distribution" WITHOUT additional units/shares
stumped me.

Appreciate any suggestions on how to handle this.

thanks, all